Primetime is not a time of day it is a state of mind

July 10th, 2006

ITV tells advertisers: back us or lose us followed by ITV needs Love to survive (still struggling to get the right URL link) and The story of the long tail

So lets listen to the metaphorical King Canute

TV’s chief executive Charles Allen has warned advertisers that they are “taking things for granted” as the broadcaster battles to scrap restrictions on the way it sells advertising slots.
Mr Allen said ITV could not guarantee big audiences for advertisers if it continues trading airtime under a system called contract rights renewal. Designed to ensure that ITV does not abuse its dominant position in the TV advertising market, CRR allows advertisers to cut their spending on the ITV1 channel in line with a fall in ratings.
As a result, advertising revenue from ITV1, which accounts for two thirds of company revenue, has fallen steeply over the past two years and has declined by 8% in the first half of the year, exacerbated by a general malaise in the advertising market.

Whilst Chris Andersen the author of the Long Tail says

The mass market is really an anomaly, an outgrowth of this extraordinary broadcast technology. Suddenly, we had radio in the 30s and TV in the 50s. We snapped into cultural lockstep overnight – watching the same shows at the same time – and we thought this was the natural state. We were homogeneous in a way we’d never been before.

The anomaly is what we describe as an oxymoron. Whilst the Guardian states

Now high-speed broadband and the low cost of digital storage and distribution are fundamentally changing our consumption habits again, particularly among those who have grown up with them.

But weighing into the debate Mike Shaw head of ad sales at ABC – who thinks that we will all go quietly into the night says

ABC is talking about employing a technology that would prevent DVR owners from doing what they presumably bought the device for: skipping commercials. “I would love it if the MSOs (multi-system operators), during the deployment of the new DVRs they’re putting out there, would disable the fast-forward (button)”

So its niche markets and niche audiences, that are not constrained by geography, or time. Or, constrained by a mass media notion of prime-time being a time of day

These seismic changes hit the music industry first and Anderson believes that it has started to grapple with what they mean but needs to go further in clearing rights to archive recordings, loosening pricing structures and continuing to innovate with “digital only” labels that lower costs.
Hollywood bought itself some time with the success of the DVD but is starting to see the first effects of the long tail in falling box office admissions. But it is in broadcasting, an industry that has relied on controlling a limited spectrum to aggregate millions of viewers for advertisers, that Anderson believes the effects of the long tail could wreak the most havoc.
“They’ve been charging more and more to reach smaller audiences. That’s got to change. As advertising shifts, I suspect there is going to be a mini-crisis,” he predicts. None of which is going to help ITV’s Charles Allen sleep any easier.

So does King Canute have a long tail? Tomi and I write at great length about the ramifications of digitalisation on business models, marketing and communications.

In our chapter on fragmentation we say

Digitalisation allows services and goods to designed, packaged and delivered in new ways. An ever increasing proportion of the global economy is based on digital goods and services. Digitalisation harmonises the competitive world, and allows copycats that appear with alarming speed to capture your customers. Even if digitalization is not affecting your market directly, it is certainly affecting how you go to market and what route you might take. So how do CEOs of existing companies, trained and familiar with their traditional business value systems, embrace the disruptive new environment of the digital universe?

In an article earlier this year ITV advertisers hold back £76m

Advertisers are withholding an estimated ?76m in TV spend this summer, with media agencies predicting that ad space on ITV in July and August could be the cheapest for a decade.
The broadcaster had been banking on an advertising bonanza around the football World Cup, with bookings expected to be up by as much as 20%.
However, ITV now faces an advertising slump unprecedented for a World Cup or European Championship year, and revenue is likely to be down in June by 4% year-on-year

You can see why either Andersens Long Tail or Communities Dominate Brands ARE required reading for those trying to get to grips with todays world.

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